Strikeforce Mining, Swire Lead Hong Kong IPO Delays

May 10 (Bloomberg) -- Strikeforce Mining & Resources Plc
and Swire Properties Ltd. may not be alone in delaying initial
public offerings in Hong Kong after the Hang Sang Index posted
its biggest weekly drop since November, according to Fulbright
Securities Ltd. and Louis Capital Markets HK Ltd.

Strikeforce, the Russian molybdenum producer controlled by
billionaire Oleg Deripaska, will delay taking orders for its IPO
in Hong Kong until equity markets have stabilized, a person with
knowledge of the decision said May 8. Swire Properties shelved
its plan to raise as much as HK$20.8 billion ($2.7 billion) two
days earlier, while people familiar with the decision said last
week that China Tian Yuan Mining Ltd. was pushing back its sale.

The postponements came as Europe’s widening debt crisis and
a breakdown in American trading systems sparked a slump in
equity markets and spurred companies from Atlanta-based
Americold Realty Trust to GSW Immobilien AG of Berlin to shelve
IPOs. Declines by United Co. Rusal and L’Occitane International
SA after their initial offerings in Hong Kong may deter more
companies from listing, according to Louis Capital Markets.

“Who at the moment is going to dare to have an IPO in Hong
Kong?” said Francis Lun, general manager at Fulbright
Securities in Hong Kong. “Companies want to raise money selling
shares, but the market is so volatile there simply isn’t the
appetite from institutional investors.”

1987 Crash

Hong Kong’s Hang Seng Index fell 5.6 percent last week, the
biggest retreat since the period ended Nov. 27. The MSCI World
Index of equities in 23 developed countries tumbled 8.3 percent,
erasing its 2010 advance, while waves of electronic selling
helped push the Dow Jones Industrial Average down as much as 9.2
percent on May 6, the biggest drop since the crash of 1987.

Swire Properties’ parent company Swire Pacific Ltd. said in
a statement to the Hong Kong stock exchange last week that it
decided to postpone the IPO after considering “the
deterioration in market conditions.” China Tian Yuan, the
largest privately owned iron ore producer in the northern
province of Hebei, delayed its offering after U.S. stocks fell
the most in a year on May 6.

L’Occitane, the first French company to hold an IPO in Hong
Kong, slid 4.5 percent in its first day of trading on May 7,
following the U.S. slump. Moscow-based Rusal, which is also
controlled by Deripaska and completed the first initial offering
by a Russian company in Hong Kong, has retreated 26 percent
since its January listing.

‘Reduced Dramatically’

The decision to delay Strikeforce Mining’s sale while the
market is weak isn’t surprising given Rusal’s drop, according to
Ben Collett, head of equities at Louis Capital Markets.

“If I were advising companies on an IPO in Hong Kong at
the moment, I’d say leave it three to six months,” he said.
“You want to hold an IPO when the market is rising. The
appetite for risk has reduced dramatically.”

Strikeforce Mining, or SMR, had planned to start taking
orders from institutions as early as this week, and the company
was seeking to raise as much as $200 million, a person with
knowledge of the plan said on May 3.

SMR produces more than 6 percent of the global supply of
ferro-molybdenum, which is used to make stainless steel. The
company also owns a stake in Buka Mining, which holds a
development license for gold, silver and copper deposits in
Mongolia, according to its Web site.

HCA Filing

Amid last week’s postponements, HCA Inc., the hospital
chain bought four years ago in a $33 billion leveraged buyout
led by New York-based KKR & Co. and Bain Capital LLC of Boston,
filed to sell as much as $4.6 billion in shares. The Nashville,
Tennessee-based company’s U.S. IPO would be the biggest since
Visa Inc. of San Francisco sold $19.7 billion in March 2008.

Agricultural Bank of China Ltd., the nation’s third-largest
lender by assets, is planning to sell as much as 18 percent of
itself in an IPO in Hong Kong and Shanghai, two people with
knowledge of the matter said this month. The Beijing-based bank
will raise at least $30 billion, the Beijing Times reported last
month, making it the world’s biggest initial sale ever.

European Union governments may agree to an emergency
lending mechanism worth around 500 billion euros ($645 billion),
according to a government official familiar with the talks, to
help stop the sovereign-debt crisis and stabilize markets after
credit downgrades of Greece, Portugal and Spain sent the euro to
a 14-month low.

“We really have to see how the markets fare in Europe,
whether the contagion over debt can be halted at just Greece,”
Fulbright Securities’ Lun said. “If that can be stopped in its
tracks, then maybe the appetite for IPOs in Hong Kong can return
in a matter of weeks.”